Motorola Re-Emerges as Wireless E-Commerce Player

In an effort to solidify its position as a major player in wireless electronic commerce, Motorola (NYSE: MOT), Inc. unveiled plans this week to introduce technology that will make all of its mobile phones Internet ready by the end of this year.

The company, which some industry observers had virtually written off just over a year ago, is taking aggressive steps to reassure consumers that it has no intention of succumbing to chief competitors Nokia and Ericsson.

Mobile Internet Applications Coming Fast

Numerous analysts are predicting a rapid ascent for mobile e-commerce. While the phones may not be appropriate for all e-commerce transactions that are handled on PCs with full screens, these analysts say the phones will allow people on the go to handle stock transactions, buy simple items like books or CDs, and quickly find interesting stores and restaurants.

"We see huge value in the long term for mobile Internet applications," said Dominic Strowbridge, Internet marketing manager for Motorola. "By the end of the year, every phone we build will be Internet-enabled, and in 2001, 100 percent of the handsets we produce will be Internet-enabled."

Motorola will accomplish this end via Wireless Application Protocol-enabled browser technology, which will allow Internet content to be viewed on smartphones and PDAs. Additionally, Motorola claims it will beat its competitors into the coming world of voice/data telephones that use General Packet Radio Services (GPRS) technology for mobile data transmissions speeds up to 115K bps.

New GPRS Technology on the Way

GPRS technology combines multiple voice channels in a digital cellular radio system to send data at high speeds, and also allows "always-on" connections to the Internet. GPRS phones will not have to dial-in to get an Internet connection, but will be connected to the Internet as long as the telephone is on.

Motorola said its GPRS phone will be widely available in the third quarter of this year, while the new Internet-enabled models are due to appear later this quarter.

GPRS technology itself, incidentally, is expected to be short-lived. Mobile telephone providers are already working on a new generation that will use completely new signaling technology to allow wideband wireless communications at rates up to two million bits per second. This so-called third generation technology will be available for installation within 12 to 24 months.

The Importance of Powerful Partners

To effectively position itself as a key player in wireless e-commerce, Motorola has announced alliances with 19 high profile Internet content providers, including Amazon.com's UK Web site.

A statement released by Motorola said, "The alliance program will make popular Internet destinations easily accessible for Motorola WAP-enabled phones."

While the new alliances will clearly offer Motorola some distinct advantages in the e-commerce marketplace, the company further indicated that its goal is to expand that number of providers to 500 in the "near future."

A Motorola E-Bank?

These announcements come on the heels of Motorola's purchase of an equity stake in 724 Solutions, Inc., a company with products that offer personalized and secure online banking, brokerage and e-commerce services over a variety of Internet-enabled wireless devices.

Without revealing details, Motorola indicated that it plans to use 724 Solutions' products in a variety of its Internet-enabled wireless devices.

Was Motorola Underestimated?

According to Strowbridge, Motorola has rebounded from a tough year. Motorola's global market share fell 2.6 percentage points to 16.9 percent in 1999, based on figures from GartnerGroup's Dataquest.

Nokia's market share at the end of the year was 26.9, up 3.4 percentage points. Strowbridge said the company changed its strategy to one of personalizing its mobile phone models -- partly by increasing content options -- because customers are more concerned with service and content than technology.

"The Web without wires is what we are trying to do," he said. "WAP is just an enabler. People don't care about the technology. They just want the services."